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Furlough: What you need to know

by Michael Cheary

We’re living in unprecedented times.

Unfortunately, it’s no different when it comes to the world of work. With the announcement of the government furlough scheme to help ease the burden on employers, many UK workers have found themselves in unchartered territory when it comes to their rights.

So what is furlough? And how do you know whether you’re eligible to be furloughed or not?

Here are some important things you need to know about what the furlough actually means for you:

Furloughed meaning

Your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of COVID-19. This is known as being ‘on furlough’.

In order to be furloughed, you and your employer must both agree to the change.

What is the Coronavirus Job Retention Scheme?

Through the launch of the Coronavirus Job Retention Scheme (CJRS), the government is helping keep furloughed workers employed during these difficult times by paying employers a grant to cover a portion of their usual monthly wage costs.

The Scheme forms part of a collective national effort to protect people’s jobs.

Who can be a furloughed worker?

Which members of staff are asked to take furlough leave is up to each individual employer.

However, any employee who was on PAYE payroll on or before March 19th 2020 is eligible to be furloughed.

Employees on any type of employment contract can be furloughed, including full-time, part-time, agency, flexible or zero-hour contracts.

Any employees placed on furlough must be furloughed for a minimum of 3 consecutive weeks. When they return to work, they must be taken off furlough.

Employees can be furloughed multiple times, but each separate instance must be for a minimum of 3 consecutive weeks. Each period of furlough can be extended by any amount of time whilst the employee is on furlough.

Can foreign nationals be furloughed?

Grants under the scheme are not counted as ‘access to public funds’, and so employees on all categories of visa can be furloughed.

How much can a furloughed worker earn?

As part of the Job Retention Scheme, the government will contribute 80% of a furloughed employee’s salary up to a maximum of £2500 per month (per employee).

They’ll also make the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay.

Employers can choose to make up the difference by paying the extra 20% of your wages – however, many may not be in a position to do this financially.

It’s also worth noting that you’ll still need to pay Income Tax, National Insurance contributions, Student Loan repayments and any other deductions (such as pension contributions) from your wage during the furlough period.

When will furloughed workers be paid?

This is a temporary scheme in place for 4 months starting from 1 March 2020 (but the government has said it may be extended if necessary), and employers can use the Scheme anytime during this period.

The HMRC portal opened on Monday 20th April, with the first payments made to employers within six working days of this date.

This meant many employers could continue paying their employees on their regularly scheduled dates. However, some companies may have been unable to pay wages until the government money was paid in – meaning there may be some delay for their employees’ salaries.

To find out exactly when you’ll be paid, it’s always best to talk to your employer directly.

When does the furlough scheme end?

However, this has already been subject to change – with the Scheme originally planned to conclude at the end of May, and then extended to the end of June. With this in mind, we recommend checking gov.uk regularly, to keep a close eye out for any future updates.

Can I still work during furlough leave?

Furloughed workers are not allowed to do any work for, or on behalf of, their employer or a linked or associated company during the furlough period. This includes providing services or generating revenue.

You may be allowed to work for someone else during this time. However, this will depend on the terms of your current employment contract – so it’s always best to check this with your employer before taking on any other work during the furlough period.

What about training?

Furloughed employees can still engage in training (as long as in doing this they don’t provide services to their company or generate revenue for/on behalf of their organisation).

As a result, furlough leave can be a good opportunity to spend more time on training and development.

If your employer asks you to undertake training on furlough leave, you’re entitled to at least the appropriate minimum wage for the time you spend training (in most cases, your furlough payment will provide sufficient monies to cover these training hours).

To find out more or check whether you’re eligible, visit the gov.uk site.

Can I be made redundant during the furlough period?

Unfortunately, some businesses may not be able to financially recover from the effects of COVID-19.

As a result, you may be let go – either for financial reasons, or another factor.

However, you may be entitled to receive redundancy pay (subject to having at least 2 years’ continuous service with your employer), and you’ll be entitled to all the same rights as you would have been prior to furlough leave.

Are sick pay and maternity pay affected during the furlough period?

No.

As with redundancy, your rights are exactly the same during the furlough period. That means you’re entitled to the same amount of statutory sick pay or maternity pay as you would be if you were still at work.

Is my annual leave affected during the furlough period?

Your annual leave will also not be affected by furloughing.

That means you’re entitled to continue accruing annual leave as usual during furlough leave (subject to the terms of your employment contract), and that if you have any pre-booked holiday your employer should “top up” to 100% of normal pay for those days.

What happens if I left my job before the furlough scheme began?

If you left your role before the March 19th 2020, either voluntarily (and your new job fell through) or via redundancy, you could be hired back by your employer and placed on furlough.

However, companies are under no obligation to do this.

To find out whether this is an option for you, we recommend contacting your previous employer directly.

How to apply for the government furlough scheme

You can’t apply for the government’s Coronavirus Job Retention Scheme yourself. This must be done by your employer.

If they do decide to place you on furlough, you will both have to agree to this. Once this is agreed, they will need to provide written confirmation before moving forward.

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